Monday, April 3, 2017

Trump's Top Trade Adviser Has a Short Position in US Government Treasury Bonds

Late Friday, the Trump administration released financial disclosure forms for key administration staffers, including Trump's top trade advisor Peter Navarro.

Navarro — whom Trump picked to “develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores”—said he owned, according to ThinkProgress, at least $15,001 in a fund called TBT UltraShort Lehman 20+.

The fund, now called the TBT ProShares UltraShort 20+ Year Treasury “seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index.”

In other words, the fund allows investors to bet on a decline in U.S. Treasury bonds.

I am personally negative on U.S Treasury bonds and have said so in the EPJ Daily Alert. But it is one thing for me to be short Treasury securities and quite another for Trump's trade adviser to be short. As Think Progress correctly notes:

[T]heoretically his holdings could create a financial incentive for Navarro recommend policies that are harmful to the stability of U.S. Treasury securities as part of Trump’s economic team, at the very least, it could indicate just how little faith he has in Trump’s ability to make “make America great again.”

Dumb dumb dumb dumb dumb....I remember when ThinkProgress or one of its ilk tried to smear Ron Paul because of his substantial holdings in gold and mining stocks. The thesis was that Ron Paul is only an advocate of the gold standard because he has it in his portfolio and wants to get rich off it...GOTCHA!...

And the same people would then say Al Gore created his climate exchange because it is what he believes in. Not to cash in on the CO2 laws he was pushing for.

So we end up with needing to make judgment calls using the track record of the person and the timing of events and how they work with his position.

So lets say this guy has been shorting treasuries for awhile, say a couple years or more because he sees trouble ahead. Then Trump gives him a call. That's not so scary, I agree. But if he made the bet after talking to Trump and holds the bet in that position it starts getting sketchy.

It's one thing to have a congressman who believes in gold and favors gold-friendly legislation betting on gold and other thing to have an appointed trade adviser betting on a failure of the administration he's a part of. Does he believe they'll fail? That's not a good sign.